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1 | P a g e
Recent increase of tax, tariffs and quotas in Bangladesh.
Course Name: ENG105
Section: 02
Student Name: Fardeen Ahmed.
ID: 1712711030 Prepared for:
NADRA ISLAM (NDM)
Associate professor. Department:English
North South University.
Date of submission: 31 August 2019.
2 | P a g e
Acknowledgements:
First, I'd like to thank my parents for their endless support. special thanks to my grandma for
always being there with me. my utmost gratitude to you Asif Ahmed my brother for helping
me out to complete paper. My deepest thanks and honor do all the students who have
participated in the survey, without their help and cooperation it was quite impossible for me to
finish the research. All my family members and friends also deserve special thanks. Finally, I
would really like to thank our respected teacher Dr Nadra Islam who has guided me through
the process and without whom this would not be possible.
3 | P a g e
Abstract:
Bangladesh started its journey as a democratic country in 1971. Now we are one of the most
successful and fastest growing developing nation in South Asia. Economic freedom, FDI and
cheap labor have kept our economy running. Similarly, without any doubt we can say that the
heart of Bangladesh’s economic development is ‘International trade’ but recently government
has created some trade barriers by imposing tax, tariffs and quotas on imported goods. So, my
objective was to find out the impact and consequences of these trade barriers on our economy
and general public in our country. From the study we’ll see that government hasn’t just
increased tax, and tariffs they have also widened the coverage of these tax and tariffs. The
study revealed that, for these trade barriers general publics are going to see higher prices, low
consumption rate, lower purchasing power, collapse of FDI, international relation. Most of
them from my survey agreed to the fact that in near future we might face low living standards
and loose our momentum. So Bangladesh’s government approach to reduce budget
deficit(shortage) by increasing tax and tariffs is not a durable solution in long term.
4 | P a g e
Table of contents:
1. Introduction………………………………………. (5-8)
2. Background……………………………………….. (9-14)
3. Research questions……………………………….. (15-16)
4. Hypothesis………………………………………… (16)
5. Research methodology…………………………… (16-17)
6. Data representation
& analysis………………………………………… ( 17-26)
7. Recommendations……………………………….. (27)
8. Conclusion……………………………………….. (27)
9. APA References …………………………………. (28)
5 | P a g e
Introduction:
Bangladesh, also known as the land of Bengals got independence from the tyranny of Pakistan
on 16 December,1971. Since then 49 years have passed and Bangladesh has significantly
improved on it’s economic side. Now we're one of the fastest developing nation in Asia.
Right now, Bangladesh is the 41st largest in the world in nominal terms, and 30th largest by
purchasing power parity; it is also classified as the Next Eleven emerging middle income
economies. Bangladesh's economic freedom score is 55.6, putting Bangladesh the 121st freest
country in the 2019 Index.
Bangladesh’s economy strongly stand still because of it’s international trade(exporting &
importing) with European Union (58.2%), United States (16.3%), Japan (3.1%0), Canada
(3.0%), India (2.4%,) Australia (1.9%), China (1.9%), Southeast Asia (1.6%) and Others
(11.6%).
6 | P a g e
Bangladesh’s main exported goods are Textiles, Garments (2nd largest exporter in the world),
Leather & Leather Goods, Pharmaceuticals and other Chemical products, Ceramic Products,
Bicycles, Jute and Jute Goods, IT, Agricultural Products, Frozen Food (Fish and Seafood)
Imported goods are Machinery and Mechanical Appliances, Electrical Equipment, Mineral
Products, Metal & metal products, Chemicals & Allied Products, Vehicles & Aircraft.
Economic freedom, efficiency and international trade have kept our economy in balance which
resulted in significant rise of our GDP. But recently government has created some trade barriers
by imposing tax, tariffs and quotas on imported goods.
According to National Budget FY2019-20 presented at the National Parliament on 13 June
2019
 Government has widened the coverage of tax and tariffs.
 VAT will be based on market price.
 Introduction of new online service for VAT and Turnover Tax registration, tax
payment, return submission and refund.
 VAT registration threshold has been increased from Tk. 80 lakh to Tk. 3 crore.
7 | P a g e
New tax and tarrif session FY2019-20:
 Increased tariffs on health haazardous tobacco products it’s set higher to reduce the
direct and indirect health risks.
 5% increased tariffs on imported powder milk ingridients.
 5% increased VAT on LPG ( Liquified petrolium gas)
 5% increased tariffs on spices, juices, rapeseeds oil, colza seeds oil, canola oil,mustard
oil.
 10% increased VAT on issuance or renewal of all kinds of vehicles registration, route
permit, fitness certificates, ownership certificate. It will discourage private vehicle
ownership.
 5% VAT on plastic based tableware, kitchenware, household accessories, stationaries
(except tiffin box and water bottle) and aluminium based kitchen and household
accessories, sanitary ware, machineries, coir based mattress.
 VAT on clothing outlets both branded and non branded will increase from 5% to 7.5%
 VAT on social media based virtual business increased from 5% to 7.5%
 VAT on manufacturing of furniture raised from 7% to 7.5%
 5% VAT on both reading glass and frame (plastic frame and metal frame)-will increase
health support cost.
 5% to 10% increase of the services provided through mobile phone SIM or RIM card-
might increase the cost of communication and internet usage.
 45% was kept on sanitary towels (pads) and tampons – which should have been reduced
considering the adverse impact on female hygiene.
8 | P a g e
On the other hand Bangladesh government has imposed quota on agriculture to restrict the
quantity of crops, vegetable fertilizers and cattle which were imported from India to our
country.
Overall upcoming problem Bangladesh is going to face due to trade barriers:
 Dissatisfaction of general public
 Increased production cost resulting in higher prices.
 Overall consumption of population will decrease.
 Foreign direct investment will fall.
 Government expenditure will escalate.
 Collapse of international relation with foreign countries.
 Economic efficiency will decrease. (Downfall of GDP)
9 | P a g e
Background:
Economic development:
The success of a country can be seen on it’s economic development. Economic
development is the process by which Bangladesh can become a developed nation in future. In
other words,it is the best effective process by which a country with low living standards
becomes a nation with high living standards. Economic development can be seen through GDP,
PPP, HDI and real GDP per capia.
GDP:
The Gross Domestic Product measures the value of economic activity within a country. It
is the sum of the market values, or prices, of all final goods and services produced in a country
during a period of time. In other word GDP =private consumption + gross investment +
government investment + government spending + (exports – imports). Since 1980 our GDP is
increasing significantly and right now our GDP is $314.656 billion (nominal, FY19 est.) and
growth rate is 7.3%.
(GDP of bangladesh from 2010 to 2018)
(GDP of Bangladesh, 2010-2018)
10 | P a g e
(GDP growthrate from 2013-1018)
Purchasing powerparity:
Purchasing power parity is based on an economic theory that states the prices of goods
and services should equalize between countries over time. International trade allows people to
shop around for the best price. After our independence our PPP was lowest in south Asia. It
slowly started to rise from 1991.According to Macro economy meter (Mecometer) we suffered
great recession in 2008.
(Purchasing power parity of Bangladesh from 1991 to 2013)
11 | P a g e
Human development index:
HDI was first developed by Nobel prize winner ‘Amartya Sen’. HDI is a statistic
composite index of life expectancy, education, and per capita income indicators. It measures
the average achievements in a country in these three basic dimensions of human
development.(Sen, 2004)
According to the annual report published by the United Nations, Bangladesh is considered a
‘medium development country’ and achieved an HDI value of 0.608 in 2017.
(HDI ranking of SAARC countries)
(Bangladesh’s HDI trends, UNDP)
year Life expectancy at birth HDI value
1990 58.4 0.387
1995 61.9 0.425
2000 65.3 0.468
2005 67.9 0.505
2010 70.2 0.545
2015 72.2 0.592
2016 72.5 0.597
2017 72.8 0.608
12 | P a g e
RealGDP per capita:
GDP per capita is a measure that results from GDP divided by the size of the nation's
overall population. So, it is theoretically the amount of money that each individual gets in that
particular country. The GDP per capita provides a much better determination of living
standards as compared to GDP. (GDP per capita of Bangladesh)
(Real GDP from 2000 to 2017, source : BBS)
Year GDP per capita
(in US$ PPP)
Year GDP per capita
(in US$ PPP)
2000 1,361 2009 2,441
2001 1,434 2010 2,592
2002 1,501 2011 2,785
2003 1,594 2012 2,979
2004 1,713 2013 3,171
2005 1,855 2014 3,396
2006 2,018 2015 3,630
2007 2,183 2016 3,901
2008 2325 2017 4,211
13 | P a g e
Bangladesh as a devloping nation is still struggling with perfect budget investment. Almost in
every fiscal year Bangladesh government face budget deflicit ( shortage). To overcome this
deflicit government imposes tax, tariffs and quotas on various goods instead of focusing on
unearned VAT. According to Bangladesh ministry of finance-
Bangladesh Govt’s Budget (2019-2020) Revised(2018-19) Actual(2017-18)
Total Tax Revenue (tk) 3,77,810 3,16,613 2,16,555
List of items those tax has been increasedfrom FY17-18 to 18-19
Bangladesh Govt’s
Total expenditure(tk)
5,23,190 4,42,541 3,21,862
Sl Items Previous rate Existing rate
1. powder milk ingridients. 0% 5%
2. LPG 2% 7%
3. spices, juices, rapeseeds oil,
mustard oil.
0% 5%
4. Plastic 1% 6%
5. Social media business 5% 7.5%
6. Clothing outlets 5% 7.5%
14 | P a g e
List of items which tax is propesed to increase more:
SL Items Existing rate Proposed rate
1 Milk and cream powder 5% 10%
2 Natural honey in bulk 5% 10%
3 Olive oil and canned oil 10% 25%
4 Particle board 10% 20%
5 AC motor single(exceeding 750 W) 1% 10%
Budget comparisonof last 3 years:
(FY 2017-2018)
15 | P a g e
(FY 2018-2019)
Research questions:
Without any doubt it can be said that the economy of Bangladesh has grown
massively.International trade has kept the balance of our economic development.It has also
increased foreign direct investment and enterprenurship. But we are lagging behind because of
tax and tariffs. That’s why I have decioded to investigate on this aspect by collecting
informations through these survey questions.
1) Is Bangladesh a developing country?
2) What might be Bangladesh's current economic position in South Asia?
3) Does Bangladesh has economic freedom ?
4) Does international trade effect our GDP ?
5) How effective is "International trade" for our economic development ?
6) What do you think about the recent tax, tariffs and quotas imposed by Bangladesh
government?
16 | P a g e
7) Is real GDP per capita more important than normal GDP ?
8) "Price increased due to taxes" is it tolerable in long term session ?
9) Should our Government need to support local producers more than general public ?
Hypothesies:
Tax, tariffs and quotas have been increased by our government. I believe that some
people will be in favor of it because they think that it’ll increase governments net income,
resulting in more infrastructural development, increase in self dependency and new routes for
local producers.
But on the other hand it’s undeniable that for these trade barriers price of goods will rise which
may create inflation, consumption capability will falll, government expenditure will rise, FDI
rate will go down, international relationship with other nations and our overall economic
efficiency will decline and this will cause dissatisfaction in the society.
Researchmethodology:
My primary research was carried out on a target population from Economics, Finance
and International business students in North South university, Daffodil international university
and Dhaka university.Some faculties of North south universities were also involved.They were
given survey questions related to the research topic.The questions contained two parts;
personal informations and questions related to ‘Increased tax, tarrifs and quotas in Bangladesh’
17 | P a g e
For my secondary research I had collected various information from different sources such as
BBS, online blogs, Finance mistry website and many bangladeshi ecobnomic website and used
popular search engines such as Google and Yahoo. I have also used journal from newspaper
and articels.
Data presentationand analysis:
After getting back the responses from students and teachers I piled up all the
information together and made conclusion about my research topic. The questions were
submitted by a group of 37 students and 3 teachers of whom there were 30 male and 10 females.
The collected informations are discussed in the following pages.
18 | P a g e
In my first question I asked weather Bangladesh is a developing country or not.This was a
fundamental question about our economy.The results were excellent. Approximately 72.5% of
them said ‘yes’, 15% said Bngladesh is underdeveloped and other 10% said ‘no’
A pie chart showing the responses is given in pictire 1
The collected data clearly represents that most of the people in our country think Bangladesh
is a developing country because most of the people are aware of our increased GDP and
infrastructural development. Though 15% people think we are still underdeveloped, they might
think so, because of our low HDI rate in Asia.
19 | P a g e
My second question was about the current economic position of Bangladesh in South Asia.
Unfortunately 56.4% people had no idea about it at all. 28.2% of them said that we are in third
position, which is wrong. Only 7.7% people were right.
A pie chart showing the responses is given in pictire 2
Through this we can see that most of the business students in these reputed universities have
no idea about our recent economic position. This could be because of nowadays most of the
students are only confined to book knowledge. But our three faculties of NSU were correct.
20 | P a g e
My third question was whether Bangladesh has economic freedom or not. 50% people said
that our overall economic freedom is indirectly controlled by our government. While 10% says
yes. 30% says that it’s at a moderate level and rest of the 10% says Bangladesh has no
economic freedom at all.
A pie chart showing the responses is given in pictire 3
From the given data we can clearly see that most of the student think that our country’s
economic freedom is oppressed by our government. The reason behind this could be
corruption, because whereever we go we see trail of corruption. Even if some think, we have
very well economic freedom but half of them think that our economic freedom is limited by
government. Though all the NSU faculties most of the economics department students are
right.
21 | P a g e
My fourth question was “Does international trade effect our GDP?”
70% says ‘yes’ which is right. But still there are 17.5% who think that our GDP only depends
on export.
A pie chart showing the responses is given in pictire 4
Information from this question shows us that majority of the students are aware that there is a
strong relation between our international trade and GDP. That means they know that if we can
improve our international trade sector our GDP will improve. But the marketing department
students got it totally wrong.
22 | P a g e
My fifth question was about the effectiveness of international trade in our economic
development. 76.9% of them stated that it is ‘very effective’. Equal percentage of students
(10.3%) stated that it’s ‘less effective’ or ‘Only FDI has effect on our economic development’.
A pie chart showing the responses is given in pictire 5
From these data we can see that most of the students choose’very effective’ because they have
the knowledge that if international trade rises then export and import will rise which will result
in increase of GDP and Real GDP per capita.
23 | P a g e
In my 6th question I wanted to know the opinions about the recent tax, tariffs and quotas
imposed by Bangladesh government. 37.5% replied that it is ‘very bad’ , 27.5% of them said
‘overall good’ , 25% students had ‘No idea at all’ and 10% of them think that ‘ it is great
because we will become more self dependent’
A pie chart showing the responses is given in pictire 6.
From this question we can see that most of the students have realised that increased tax , tariffs
and quotas are not good at all. But some students stated it’s good thinking that we’ll cope up
with it while rest of the students are thinking that because of this increased tax and tariffs our
local production will rise and we will become more self dependent.
24 | P a g e
My seventh question was whether Real GDP per capita is more important than normal GDP or
not. 62.5% of them stated ‘yes’, 25% of the students had no idea and only 12.5% replied ’no’
.
A pie chart showing the responses is given in pictire 7
From this question we can see that majority of the students said ‘yes’ because they know that
Real GDP can be calculated by deviding GDP with capita which is more effective and accurate
than normal GDP. It also gives better comparison of economic development of a country. Some
students from marketing department said ‘no’ probabbly because in our country we are more
familier with normal GDP.
25 | P a g e
My 8th question was -“Price increased due to taxes” is it tolerable in long term ? this was a bit
critical question and the results were as expected. 57.5% replied ‘No, because the inflation will
rise’ . 25% said that “It might be tolerable because of our increased purchasing power’ and the
rest of the 17.5% literally said ‘yes’
This responds shows that most of the students believe that inflation will rise because, for
increased taxes importers will import less goods that is why the demand of those goods will
rise and that will result in inflation. Still some students believe that it’s tolerable in long term
because our purchasing power has increased. But in reality spending more money for the same
product is inefficient.
26 | P a g e
My last question was about Our government supporting local producers more than general
public. In this question 55.6% of the students said ‘no’ , whereas only 22.2% students were
infavor of the idea. Rest 22.2% of them stated ‘no idea at all’
From this pie graph we can clearly see that majority of the students are against this idea,
because they know that, helping local producers by iposing tax and tariffs will only escalate
the price of essential imported goods and in near future the supply of these products/goods will
decline.So people will be forced to buy low quality local prducts at a higher price. On the other
hand some students were in favor of this idea because they might think that infant local
producers must be protected by our government in order to increase the export.
27 | P a g e
Recommendation:
From the data analysis of my research we can see that tax, tariffs and quotas are
undoubtedly the silent killer of our economy.Since our givernment only gets 21.9% tax
properly and rest of the taxes are not given or collected because of various reasons that’s why
instead of increasing these trade barriers on imported goods our government should focus and
investigate on individual income tax, corporate income tax, payroll tax, excise tax. Otherwise
public frustation and dissatisfaction will escalate which will end in social chaos.
Conclusion:
After the great economic depression 2008 Bangladesh has found out ‘International
trade’ as the medicine of economic progress and it is up to our government to keep the
momentum going. But thses trade barriers have already affected many foreign businesses and
importers. If it doesn’t stop then the rate foreign investment will decrease and our economy
will go back where it was. Beside by trading more we will be able to create strong relationship
with many foreign countries which will make a strong trading platform for us. That’s why there
is a saying- “The only way a durable peace can be created is by world wide restoration of
economic activity and international trade” (Forrestal, 2008). So, at the end it can be said that
tax, tariifs, quotas should be minized at an adjustable level so that it is benificial for both the
government and general people.
28 | P a g e
References:
1. Economy of Bangladesh. (n.d.). Retrieved August 16, 2019, from
https://en.m.wikipedia.org/wiki/Economy of_Bangladesh
2.Foster.R.B. (2019, January) The Real GDP of Asian countries. Retrieved from
https://en.m.wikipedia.org/wiki/Economy of_Bangladesh
3.Anonymous, (2015, August10) The history of Bangladesh economy. Retrieved from
http://customs.gov.bd/portal/services/tariff/index.jsf
4.Rahman.A.M. (2008,January) The foreign trade of Bangladesh. Retrieved from
https://www.researchgate.net/The_foreign_trade_of_Bangladesh

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Bangladesh's Recent Trade Barriers May Harm Economy

  • 1. 1 | P a g e Recent increase of tax, tariffs and quotas in Bangladesh. Course Name: ENG105 Section: 02 Student Name: Fardeen Ahmed. ID: 1712711030 Prepared for: NADRA ISLAM (NDM) Associate professor. Department:English North South University. Date of submission: 31 August 2019.
  • 2. 2 | P a g e Acknowledgements: First, I'd like to thank my parents for their endless support. special thanks to my grandma for always being there with me. my utmost gratitude to you Asif Ahmed my brother for helping me out to complete paper. My deepest thanks and honor do all the students who have participated in the survey, without their help and cooperation it was quite impossible for me to finish the research. All my family members and friends also deserve special thanks. Finally, I would really like to thank our respected teacher Dr Nadra Islam who has guided me through the process and without whom this would not be possible.
  • 3. 3 | P a g e Abstract: Bangladesh started its journey as a democratic country in 1971. Now we are one of the most successful and fastest growing developing nation in South Asia. Economic freedom, FDI and cheap labor have kept our economy running. Similarly, without any doubt we can say that the heart of Bangladesh’s economic development is ‘International trade’ but recently government has created some trade barriers by imposing tax, tariffs and quotas on imported goods. So, my objective was to find out the impact and consequences of these trade barriers on our economy and general public in our country. From the study we’ll see that government hasn’t just increased tax, and tariffs they have also widened the coverage of these tax and tariffs. The study revealed that, for these trade barriers general publics are going to see higher prices, low consumption rate, lower purchasing power, collapse of FDI, international relation. Most of them from my survey agreed to the fact that in near future we might face low living standards and loose our momentum. So Bangladesh’s government approach to reduce budget deficit(shortage) by increasing tax and tariffs is not a durable solution in long term.
  • 4. 4 | P a g e Table of contents: 1. Introduction………………………………………. (5-8) 2. Background……………………………………….. (9-14) 3. Research questions……………………………….. (15-16) 4. Hypothesis………………………………………… (16) 5. Research methodology…………………………… (16-17) 6. Data representation & analysis………………………………………… ( 17-26) 7. Recommendations……………………………….. (27) 8. Conclusion……………………………………….. (27) 9. APA References …………………………………. (28)
  • 5. 5 | P a g e Introduction: Bangladesh, also known as the land of Bengals got independence from the tyranny of Pakistan on 16 December,1971. Since then 49 years have passed and Bangladesh has significantly improved on it’s economic side. Now we're one of the fastest developing nation in Asia. Right now, Bangladesh is the 41st largest in the world in nominal terms, and 30th largest by purchasing power parity; it is also classified as the Next Eleven emerging middle income economies. Bangladesh's economic freedom score is 55.6, putting Bangladesh the 121st freest country in the 2019 Index. Bangladesh’s economy strongly stand still because of it’s international trade(exporting & importing) with European Union (58.2%), United States (16.3%), Japan (3.1%0), Canada (3.0%), India (2.4%,) Australia (1.9%), China (1.9%), Southeast Asia (1.6%) and Others (11.6%).
  • 6. 6 | P a g e Bangladesh’s main exported goods are Textiles, Garments (2nd largest exporter in the world), Leather & Leather Goods, Pharmaceuticals and other Chemical products, Ceramic Products, Bicycles, Jute and Jute Goods, IT, Agricultural Products, Frozen Food (Fish and Seafood) Imported goods are Machinery and Mechanical Appliances, Electrical Equipment, Mineral Products, Metal & metal products, Chemicals & Allied Products, Vehicles & Aircraft. Economic freedom, efficiency and international trade have kept our economy in balance which resulted in significant rise of our GDP. But recently government has created some trade barriers by imposing tax, tariffs and quotas on imported goods. According to National Budget FY2019-20 presented at the National Parliament on 13 June 2019  Government has widened the coverage of tax and tariffs.  VAT will be based on market price.  Introduction of new online service for VAT and Turnover Tax registration, tax payment, return submission and refund.  VAT registration threshold has been increased from Tk. 80 lakh to Tk. 3 crore.
  • 7. 7 | P a g e New tax and tarrif session FY2019-20:  Increased tariffs on health haazardous tobacco products it’s set higher to reduce the direct and indirect health risks.  5% increased tariffs on imported powder milk ingridients.  5% increased VAT on LPG ( Liquified petrolium gas)  5% increased tariffs on spices, juices, rapeseeds oil, colza seeds oil, canola oil,mustard oil.  10% increased VAT on issuance or renewal of all kinds of vehicles registration, route permit, fitness certificates, ownership certificate. It will discourage private vehicle ownership.  5% VAT on plastic based tableware, kitchenware, household accessories, stationaries (except tiffin box and water bottle) and aluminium based kitchen and household accessories, sanitary ware, machineries, coir based mattress.  VAT on clothing outlets both branded and non branded will increase from 5% to 7.5%  VAT on social media based virtual business increased from 5% to 7.5%  VAT on manufacturing of furniture raised from 7% to 7.5%  5% VAT on both reading glass and frame (plastic frame and metal frame)-will increase health support cost.  5% to 10% increase of the services provided through mobile phone SIM or RIM card- might increase the cost of communication and internet usage.  45% was kept on sanitary towels (pads) and tampons – which should have been reduced considering the adverse impact on female hygiene.
  • 8. 8 | P a g e On the other hand Bangladesh government has imposed quota on agriculture to restrict the quantity of crops, vegetable fertilizers and cattle which were imported from India to our country. Overall upcoming problem Bangladesh is going to face due to trade barriers:  Dissatisfaction of general public  Increased production cost resulting in higher prices.  Overall consumption of population will decrease.  Foreign direct investment will fall.  Government expenditure will escalate.  Collapse of international relation with foreign countries.  Economic efficiency will decrease. (Downfall of GDP)
  • 9. 9 | P a g e Background: Economic development: The success of a country can be seen on it’s economic development. Economic development is the process by which Bangladesh can become a developed nation in future. In other words,it is the best effective process by which a country with low living standards becomes a nation with high living standards. Economic development can be seen through GDP, PPP, HDI and real GDP per capia. GDP: The Gross Domestic Product measures the value of economic activity within a country. It is the sum of the market values, or prices, of all final goods and services produced in a country during a period of time. In other word GDP =private consumption + gross investment + government investment + government spending + (exports – imports). Since 1980 our GDP is increasing significantly and right now our GDP is $314.656 billion (nominal, FY19 est.) and growth rate is 7.3%. (GDP of bangladesh from 2010 to 2018) (GDP of Bangladesh, 2010-2018)
  • 10. 10 | P a g e (GDP growthrate from 2013-1018) Purchasing powerparity: Purchasing power parity is based on an economic theory that states the prices of goods and services should equalize between countries over time. International trade allows people to shop around for the best price. After our independence our PPP was lowest in south Asia. It slowly started to rise from 1991.According to Macro economy meter (Mecometer) we suffered great recession in 2008. (Purchasing power parity of Bangladesh from 1991 to 2013)
  • 11. 11 | P a g e Human development index: HDI was first developed by Nobel prize winner ‘Amartya Sen’. HDI is a statistic composite index of life expectancy, education, and per capita income indicators. It measures the average achievements in a country in these three basic dimensions of human development.(Sen, 2004) According to the annual report published by the United Nations, Bangladesh is considered a ‘medium development country’ and achieved an HDI value of 0.608 in 2017. (HDI ranking of SAARC countries) (Bangladesh’s HDI trends, UNDP) year Life expectancy at birth HDI value 1990 58.4 0.387 1995 61.9 0.425 2000 65.3 0.468 2005 67.9 0.505 2010 70.2 0.545 2015 72.2 0.592 2016 72.5 0.597 2017 72.8 0.608
  • 12. 12 | P a g e RealGDP per capita: GDP per capita is a measure that results from GDP divided by the size of the nation's overall population. So, it is theoretically the amount of money that each individual gets in that particular country. The GDP per capita provides a much better determination of living standards as compared to GDP. (GDP per capita of Bangladesh) (Real GDP from 2000 to 2017, source : BBS) Year GDP per capita (in US$ PPP) Year GDP per capita (in US$ PPP) 2000 1,361 2009 2,441 2001 1,434 2010 2,592 2002 1,501 2011 2,785 2003 1,594 2012 2,979 2004 1,713 2013 3,171 2005 1,855 2014 3,396 2006 2,018 2015 3,630 2007 2,183 2016 3,901 2008 2325 2017 4,211
  • 13. 13 | P a g e Bangladesh as a devloping nation is still struggling with perfect budget investment. Almost in every fiscal year Bangladesh government face budget deflicit ( shortage). To overcome this deflicit government imposes tax, tariffs and quotas on various goods instead of focusing on unearned VAT. According to Bangladesh ministry of finance- Bangladesh Govt’s Budget (2019-2020) Revised(2018-19) Actual(2017-18) Total Tax Revenue (tk) 3,77,810 3,16,613 2,16,555 List of items those tax has been increasedfrom FY17-18 to 18-19 Bangladesh Govt’s Total expenditure(tk) 5,23,190 4,42,541 3,21,862 Sl Items Previous rate Existing rate 1. powder milk ingridients. 0% 5% 2. LPG 2% 7% 3. spices, juices, rapeseeds oil, mustard oil. 0% 5% 4. Plastic 1% 6% 5. Social media business 5% 7.5% 6. Clothing outlets 5% 7.5%
  • 14. 14 | P a g e List of items which tax is propesed to increase more: SL Items Existing rate Proposed rate 1 Milk and cream powder 5% 10% 2 Natural honey in bulk 5% 10% 3 Olive oil and canned oil 10% 25% 4 Particle board 10% 20% 5 AC motor single(exceeding 750 W) 1% 10% Budget comparisonof last 3 years: (FY 2017-2018)
  • 15. 15 | P a g e (FY 2018-2019) Research questions: Without any doubt it can be said that the economy of Bangladesh has grown massively.International trade has kept the balance of our economic development.It has also increased foreign direct investment and enterprenurship. But we are lagging behind because of tax and tariffs. That’s why I have decioded to investigate on this aspect by collecting informations through these survey questions. 1) Is Bangladesh a developing country? 2) What might be Bangladesh's current economic position in South Asia? 3) Does Bangladesh has economic freedom ? 4) Does international trade effect our GDP ? 5) How effective is "International trade" for our economic development ? 6) What do you think about the recent tax, tariffs and quotas imposed by Bangladesh government?
  • 16. 16 | P a g e 7) Is real GDP per capita more important than normal GDP ? 8) "Price increased due to taxes" is it tolerable in long term session ? 9) Should our Government need to support local producers more than general public ? Hypothesies: Tax, tariffs and quotas have been increased by our government. I believe that some people will be in favor of it because they think that it’ll increase governments net income, resulting in more infrastructural development, increase in self dependency and new routes for local producers. But on the other hand it’s undeniable that for these trade barriers price of goods will rise which may create inflation, consumption capability will falll, government expenditure will rise, FDI rate will go down, international relationship with other nations and our overall economic efficiency will decline and this will cause dissatisfaction in the society. Researchmethodology: My primary research was carried out on a target population from Economics, Finance and International business students in North South university, Daffodil international university and Dhaka university.Some faculties of North south universities were also involved.They were given survey questions related to the research topic.The questions contained two parts; personal informations and questions related to ‘Increased tax, tarrifs and quotas in Bangladesh’
  • 17. 17 | P a g e For my secondary research I had collected various information from different sources such as BBS, online blogs, Finance mistry website and many bangladeshi ecobnomic website and used popular search engines such as Google and Yahoo. I have also used journal from newspaper and articels. Data presentationand analysis: After getting back the responses from students and teachers I piled up all the information together and made conclusion about my research topic. The questions were submitted by a group of 37 students and 3 teachers of whom there were 30 male and 10 females. The collected informations are discussed in the following pages.
  • 18. 18 | P a g e In my first question I asked weather Bangladesh is a developing country or not.This was a fundamental question about our economy.The results were excellent. Approximately 72.5% of them said ‘yes’, 15% said Bngladesh is underdeveloped and other 10% said ‘no’ A pie chart showing the responses is given in pictire 1 The collected data clearly represents that most of the people in our country think Bangladesh is a developing country because most of the people are aware of our increased GDP and infrastructural development. Though 15% people think we are still underdeveloped, they might think so, because of our low HDI rate in Asia.
  • 19. 19 | P a g e My second question was about the current economic position of Bangladesh in South Asia. Unfortunately 56.4% people had no idea about it at all. 28.2% of them said that we are in third position, which is wrong. Only 7.7% people were right. A pie chart showing the responses is given in pictire 2 Through this we can see that most of the business students in these reputed universities have no idea about our recent economic position. This could be because of nowadays most of the students are only confined to book knowledge. But our three faculties of NSU were correct.
  • 20. 20 | P a g e My third question was whether Bangladesh has economic freedom or not. 50% people said that our overall economic freedom is indirectly controlled by our government. While 10% says yes. 30% says that it’s at a moderate level and rest of the 10% says Bangladesh has no economic freedom at all. A pie chart showing the responses is given in pictire 3 From the given data we can clearly see that most of the student think that our country’s economic freedom is oppressed by our government. The reason behind this could be corruption, because whereever we go we see trail of corruption. Even if some think, we have very well economic freedom but half of them think that our economic freedom is limited by government. Though all the NSU faculties most of the economics department students are right.
  • 21. 21 | P a g e My fourth question was “Does international trade effect our GDP?” 70% says ‘yes’ which is right. But still there are 17.5% who think that our GDP only depends on export. A pie chart showing the responses is given in pictire 4 Information from this question shows us that majority of the students are aware that there is a strong relation between our international trade and GDP. That means they know that if we can improve our international trade sector our GDP will improve. But the marketing department students got it totally wrong.
  • 22. 22 | P a g e My fifth question was about the effectiveness of international trade in our economic development. 76.9% of them stated that it is ‘very effective’. Equal percentage of students (10.3%) stated that it’s ‘less effective’ or ‘Only FDI has effect on our economic development’. A pie chart showing the responses is given in pictire 5 From these data we can see that most of the students choose’very effective’ because they have the knowledge that if international trade rises then export and import will rise which will result in increase of GDP and Real GDP per capita.
  • 23. 23 | P a g e In my 6th question I wanted to know the opinions about the recent tax, tariffs and quotas imposed by Bangladesh government. 37.5% replied that it is ‘very bad’ , 27.5% of them said ‘overall good’ , 25% students had ‘No idea at all’ and 10% of them think that ‘ it is great because we will become more self dependent’ A pie chart showing the responses is given in pictire 6. From this question we can see that most of the students have realised that increased tax , tariffs and quotas are not good at all. But some students stated it’s good thinking that we’ll cope up with it while rest of the students are thinking that because of this increased tax and tariffs our local production will rise and we will become more self dependent.
  • 24. 24 | P a g e My seventh question was whether Real GDP per capita is more important than normal GDP or not. 62.5% of them stated ‘yes’, 25% of the students had no idea and only 12.5% replied ’no’ . A pie chart showing the responses is given in pictire 7 From this question we can see that majority of the students said ‘yes’ because they know that Real GDP can be calculated by deviding GDP with capita which is more effective and accurate than normal GDP. It also gives better comparison of economic development of a country. Some students from marketing department said ‘no’ probabbly because in our country we are more familier with normal GDP.
  • 25. 25 | P a g e My 8th question was -“Price increased due to taxes” is it tolerable in long term ? this was a bit critical question and the results were as expected. 57.5% replied ‘No, because the inflation will rise’ . 25% said that “It might be tolerable because of our increased purchasing power’ and the rest of the 17.5% literally said ‘yes’ This responds shows that most of the students believe that inflation will rise because, for increased taxes importers will import less goods that is why the demand of those goods will rise and that will result in inflation. Still some students believe that it’s tolerable in long term because our purchasing power has increased. But in reality spending more money for the same product is inefficient.
  • 26. 26 | P a g e My last question was about Our government supporting local producers more than general public. In this question 55.6% of the students said ‘no’ , whereas only 22.2% students were infavor of the idea. Rest 22.2% of them stated ‘no idea at all’ From this pie graph we can clearly see that majority of the students are against this idea, because they know that, helping local producers by iposing tax and tariffs will only escalate the price of essential imported goods and in near future the supply of these products/goods will decline.So people will be forced to buy low quality local prducts at a higher price. On the other hand some students were in favor of this idea because they might think that infant local producers must be protected by our government in order to increase the export.
  • 27. 27 | P a g e Recommendation: From the data analysis of my research we can see that tax, tariffs and quotas are undoubtedly the silent killer of our economy.Since our givernment only gets 21.9% tax properly and rest of the taxes are not given or collected because of various reasons that’s why instead of increasing these trade barriers on imported goods our government should focus and investigate on individual income tax, corporate income tax, payroll tax, excise tax. Otherwise public frustation and dissatisfaction will escalate which will end in social chaos. Conclusion: After the great economic depression 2008 Bangladesh has found out ‘International trade’ as the medicine of economic progress and it is up to our government to keep the momentum going. But thses trade barriers have already affected many foreign businesses and importers. If it doesn’t stop then the rate foreign investment will decrease and our economy will go back where it was. Beside by trading more we will be able to create strong relationship with many foreign countries which will make a strong trading platform for us. That’s why there is a saying- “The only way a durable peace can be created is by world wide restoration of economic activity and international trade” (Forrestal, 2008). So, at the end it can be said that tax, tariifs, quotas should be minized at an adjustable level so that it is benificial for both the government and general people.
  • 28. 28 | P a g e References: 1. Economy of Bangladesh. (n.d.). Retrieved August 16, 2019, from https://en.m.wikipedia.org/wiki/Economy of_Bangladesh 2.Foster.R.B. (2019, January) The Real GDP of Asian countries. Retrieved from https://en.m.wikipedia.org/wiki/Economy of_Bangladesh 3.Anonymous, (2015, August10) The history of Bangladesh economy. Retrieved from http://customs.gov.bd/portal/services/tariff/index.jsf 4.Rahman.A.M. (2008,January) The foreign trade of Bangladesh. Retrieved from https://www.researchgate.net/The_foreign_trade_of_Bangladesh